Let’s cut to the chase – when it comes to your core business, you’re most likely a knowledgeable, successful insurance selling machine. However, when it comes to products and sales tactics that may be new to you – say disability insurance for example – you may feel outside of your comfort zone. Disability insurance should be an integral part of every clients portfolio and we’re here to help you make the sale.
When is the right time to purchase disability insurance – also called paycheck protection?
Hint:If you have a job, you need DI.
The most fundamental tactic to selling disability insurance is that it replaces lost income in the event of injury or illness. Disability insurance will help clients pay bills and maintain their lifestyle when they need it most. The most critical decisions a client needs to make when purchasing disability insurance are:
What are your client's "substantial and material" duties? Don't guess, ask.
If you get up and go to work in the morning, you have a need for disability insurance. The first step in selling disability insurance to your client is understanding what it is your client does on a daily basis. You may want to begin your discussion of disability insurance by asking your client to simply explain what it is they do on a regular basis. What essential tasks do they perform that, if they were unable to perform them, they would want to be considered disabled? Take note of any and all duties, this will help insure that you are proposing the most accurate and competitive product.
For example, an executive that often travels internationally for business, is considered a different risk than an executive whose travel is limited to the US.
Ask your client how they see themselves being disabled.
Understanding how your client does their job should also help you understand what type of disability scenario they should be concerned with. If you ask your client how he sees himself being disabled, many will reply “I don’t know, I never really thought about it.” And that is exactly the point; most people don’t think about being disabled until some event forces them to. Your job is to make them think about being disabled and prepare for it, before it happens.
If your client is under 50, it is likely they fear the catastrophic “car accident”, and if they are over 50, an illness is often how they see themselves being disabled. The fact is most permanent long-term disabilities are the result of an illness. Either way, attempt to have your client experience a virtual disability so that they begin to understand the hardships involved with a disability, and how unprepared they are to face them.
When does the policy pay benefits?
Describing the benefits of any disability policy is not an easy thing to do, especially if your client is not familiar with insurance lingo and jargon. One approach is to describe the different claim scenarios that exist and then explain how the product would perform and pay benefits. Again, it is most helpful to fully understand your client’s job duties so that you can tailor the claim scenario specifically to your client’s occupation. The four general claims scenarios that exist are:
Apply these 4 scenarios to the coverage you are proposing, and you will have covered all of the situations someone could find themselves in at claim time and the benefits they could expect to receive with and without disability insurance. This should result in a good discussion of the policy and how it works. It does not however address the number one objection, the cost of the insurance. Emphasize to your client that the premium is not the problem, it’s the solution. Putting the premium into proper perspective (How much does your client spend on cable TV?) is a critical part of the sales process for disability insurance.
Make sure the relationship between the potential total benefit and the premium is obvious.
The first question many clients ask when approached about disability insurance is, “How much does it cost?” Given the many variables (i.e. age, gender, occupation and smoker status) that affect the premium, the answer is not as easy as your clients may wish. A good approximation is that it costs 2% - 5% of someone’s gross earnings to protect 60% - 65% of someone’s net income on a tax-free basis. The point is that while disability benefits are often given in terms of a monthly benefit, make sure to emphasize that the potential benefits can exceed $1,000,000. That helps put the premium into perspective.
Is it reasonable to spend 2% - 5% of your income today, to insure you and your family maintain the standard of living they have become accustom to in the event the breadwinner were disabled? Put this way most clients would agree that the premium is not the problem.